Governmental Transfers and Altruistic Private Transfers

Amihai Glazer and Hiroki Kondo
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Hiroki Kondo: Department of Economics, Sophia University

No 111209, Working Papers from University of California-Irvine, Department of Economics

Abstract: An altruistic agent who may aid a person with a low income may induce that person to exert little effort to increase his income. Such behavior generates a Good Samaritan Dilemma, in which welfare is lower than when no one is altruistic. Governmental transfers, which restrict reallocation from a person who saves much to one who saves little, reduce the effect, and can lead to an outcome which is Pareto-superior to the outcome under a Nash equilibrium with no government taxation and transfers.

Keywords: Social security; Moral hazard; Savings; Altruism (search for similar items in EconPapers)
JEL-codes: D13 D64 D91 (search for similar items in EconPapers)
Pages: 25 pages
Date: 2012-05
New Economics Papers: this item is included in nep-cta, nep-pub and nep-soc
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https://www.economics.uci.edu/files/docs/workingpapers/2011-2012/glazer-09.pdf (application/pdf)

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Journal Article: Governmental transfers and altruistic private transfers (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:irv:wpaper:111209

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